The U.S. Treasury has been instructed to halt penny production, marking a pivotal shift in American currency and financial practices.
Quick Takes
- Donald Trump has stopped minting new pennies due to high production costs.
- Each penny costs over 3 cents to produce, incurring significant losses.
- The U.S. Mint reported a $85.3 million loss from penny production in 2024.
- It remains uncertain if Trump holds the authority to end penny production.
Rising Costs and Fiscal Impact
The production cost of a penny now exceeds 3 cents. The U.S. Mint disclosed that in 2024, it cost around 3.7 cents to produce each penny. This situation led to a $85.3 million deficit for the fiscal year, as nearly 3.2 billion pennies were manufactured.
In FY2023, taxpayers bore a cost of over $179 million for 4.5 billion pennies. Such figures highlight a growing inefficiency that Trump aims to address with this new directive. Production has been strained by the rising prices of zinc and copper, crucial components of the penny.
Trump says he has directed US Treasury to stop minting new pennies, citing rising cost https://t.co/ElV7RaGHEL
— FOX 5 San Diego (@fox5sandiego) February 10, 2025
Authority and Congressional Oversight
Trump’s authority to instruct the stoppage of penny production is questioned, as Congress typically oversees coin currency manufacture. This procedural ambiguity adds a layer of complexity to the decision. The move is framed within the broader efforts of his administration to identify $2 trillion in governmental savings.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” – Donald Trump
The Department of Government Efficiency, led by Elon Musk, has also highlighted the penny production’s inefficiencies. Most pennies remain unspent, forcing continued production to meet demands, compounding the financial strain on the government.
Breaking News: President Trump ordered the Treasury to stop minting pennies, saying the coins cost more to produce than their face value. https://t.co/nbUYA1aDL9
— The New York Times (@nytimes) February 10, 2025
International Precedents and Adaptation
Several nations, including Canada and Brazil, have already ceased production or circulation of low-denomination coins. This provides a useful template for the U.S. as it navigates the adaptation to a penny-less economy. Adoption of rounding mechanisms will become essential for daily transactions without pennies.
Proponents of discontinuing the penny argue for cost savings and speedier transactions. The U.S. must now adjust its currency system to align with these forward-thinking fiscal strategies, ensuring minimal disruption for consumers and businesses.
